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GBPUSD Technical Analysis – The tide seems to be turning


The USD has been overall
rangebound in the last couple of weeks. The last week’s strength might have
been influenced more by quarter-end flows rather than something fundamental as
the economic data didn’t change interest rates expectations.

All else being equal, the
data should continue to support the risk sentiment amid a pickup in growth
without inflationary pressures, which could be a headwind for the greenback.

The GBP, on the other hand,
has been under pressure since the BoE policy decision but overall it’s been more of a strong
US Dollar story. This week the greenback seems to be losing ground as a new
month started. This weakness might extend further, so it will be interesting to
see how the price action evolves in the next days.

Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD eventually bounced from the support at 1.2635. That’s where the buyers stepped in
with a defined risk below the level to position for a rally into the 1.28
handle. The sellers will want to see the price breaking below the 1.2635
support to get back control and increase the bearish bets into the 1.25 handle

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have formed a range between the 1.2635 support and the 1.27 resistance.
The buyers will want to see the price breaking higher to increase the bullish
bets into the 1.28 handle next. The sellers, on the other hand, will likely
lean on the resistance to position for a drop back into the support targeting a
break below it.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have an interesting zone around the 1.2670 level where the price reacted
to several times in the past weeks. This level can act as kind of a barometer
for the sentiment with the price staying above it being more bullish and below
it being more bearish. The red lines define the average daily range for today.


Today we get the US ADP, the US Jobless Claims, the US ISM Services PMI and
the FOMC Meeting Minutes. Tomorrow is going to be a US Holiday for Independence
Day and we will also have the UK General Election. Finally, on Friday, we
conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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